Lawrence Reed has been president of the Mackinac Center for Public Policy (Michigan) since it began in late 1987. It has grown to be the largest—and one of the most influential—of the U.S. state-based think tanks.

Mackinac's achievements in developing and promoting innovative policy solutions have brought admirers to its doors, wanting to learn the secrets of the organization's success. The organization formalized this mentoring role into Leadership Conferences that have drawn more than 358 people from at least 40 states and 40 countries since 1998.

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We sat down with Larry Reed and asked him to share his thoughts on running a successful think tank that speaks to such a wide audience.

How does the Mackinac Center define success?

Success is not pushing lots of paper out the door or counting clips in the newspaper that mention your name. Nor is it giving speeches or pontificating to the already-converted about the issues of the day. I'm not saying those things are irrelevant or unimportant; I'm simply saying that without further action they may not make a whole lot of difference.

Organizations like ours should be focused on making a huge difference in the way people think, act, vote, and otherwise behave.

At the Mackinac Center for Public Policy, we think of success in terms of changing minds, changing policies, and changing laws. It means building a growing network of people who are informed and passionate about free- market ideas and who are willing to translate the knowledge they've gained into a force to be reckoned with by policy makers and opinion leaders. Success means forcing public discussion of issues and perspectives that were not previously on the table and making our case so persuasively that it becomes part of mainstream thinking.

If the Mackinac Center is judged "successful" five, ten, or twenty years from now, it won't be because people will be saying, "They sure printed a lot of words and held a lot of meetings." It will be because people will be saying, "That place pushed the envelope and shifted the focus of public understanding. Its ideas were enacted into law and became part of everyday convention. Important people look to it for advice about what needs to be done to improve the lives and preserve the liberties of the citizenry."

From a management perspective, what has been the biggest challenge in growing to where your institute is today?

The biggest challenge in growing to our present size (30 full-time employees and an annual budget of $3 million) has been managing growth itself without losing the entrepreneurial drive that is so crucial in the early days of any organization. It takes conscious - even painstaking - effort to maintain high standards, make continuous improvement a daily way of life, attract quality staff, and keep everyone's eyes on the prize.

It's customary for many in my position to say that fundraising is the biggest challenge, but I think in many respects that's less important than remaining entrepreneurial, well-organized, and passionate about the mission—keep all that in good order, and the fundraising takes care of itself. The market really does work! Build the best mousetrap in sight, and selling mousetraps will fall into place. Organizations like mine may be "non-profit" but we ought to think and act as if we are for-profit firms with both customers and competition that we cannot forget.

What one piece of advice do you wish you had received—or are thankful you did receive—in the early days of starting Mackinac?

Build a broad base of support and never become dependent upon one or a few "sugar-daddies" who can cripple the organization if they cease their support or if they attempt to push it in a direction contrary to its founding mission. That was advice that I did receive early on, and that I felt instinctively as well, and I've always been grateful that we evolved in sync with that wisdom. A close second would be the advice to get organized and stay organized. Flying by the seat of our pants means flying in all directions, and that's a prescription for frustration and ineffectiveness.

What skill sets do think tank leaders need to develop—particularly for those who might be a one- or two- person shop today, but who aspire to be a larger, more professional operation?

Think tank leaders need to develop MANY traits and skills to maximize their potential for success, but among the most important in my view are these:

The ability to hire and keep the very best employees and never be intimidated by having people around you who are better than you are at many things;

Learning to share credit and to build an organization that is focused on fostering and rewarding leadership skills among your colleagues. If, after a few years of operation, the only person outsiders identify with your organization is you, then you've developed an ephemeral cult instead of a long-term, viable and vibrant entity;

A good sense for organization and planning for the long-term;

A sensitive antenna that allows you to avoid public gaffes and negative stereotypes and craft a message that will resonate with broad segments of the public. Too many on our side talk and write as if they just want to preach to the choir, or as if they want to beat their breasts instead of actually winning victories for freedom and free markets;

A set of habits, mannerisms and behavior that exudes leadership and gives your staff good and natural reasons to be inspired by your example.